If you're having problems with Terraria and the new 1.1 update, below are a few fixes you can try. If you have any fixes you would like to add or if you find any of the fixes below don't work for you, please post a comment below and let us know. Thank you for your contributions.
1. Terraria lags / Low FPS: This seems to be a problem with the 1.1 update. The first thing you want to do is make sure frame skipping is turned ON. Without frame skipping, Terraria runs like a snail.

Before anything, try changing the lighting settings by hitting F9. Some lighting settings may make the game run slower. This usually fixes many peoples lag!

Terraria will lag and get low FPS if you don't have the latest version of the .Net Framework and XNA, so check that those things are updated. (Make sure you install the .Net framework first, and then the XNA framework.)

If you're running the game full screen and getting lag, try running it in windowed mode.

Make sure you're not running any programs in the background while playing Terraria. (Even an internet browser with a video open could cause Terraria to lag on some computers.)

According to a post on the Terraria forums, on a 1.6ghz dual core, ATI Radeon X1300 PC, changing lighting to retro, quality to low, and frameskip to "on" reverted to pre-1.1 framerate.

Some people have confirmed that turning frameskip off and forcing V-sync through their video card utilities will correct framerate issues. Possibly a difference in video card drivers.

Adjusting parallax may increase framerate. Particularly one user has reported that raising parallax to 100% will increase framerate.

Turning the quality to Auto intead of High may also help with the framerate.

Something else that worked for me, which is sort of an odd fix, is to Alt+Tab out of the game back to your desktop, then Alt+Tab back in, this seems to fix the lag for me. (If you can't alt tab for some reason, hit Ctrl + Alt + Delete which should bring you back to the desktop and open the task manager. Then just close the task manager open Terraria again from the taskbar.)

2. Terraria Unavailable / This game is currently unavailable: When you try opening Terraria in Steam, you may get the message "This game is currently unavaiable". To fix this, close steam (right click the icon in your taskbar and click "Exit" or ctrl + alt + delete and close Steam through the Task Manager.

Once you restart Steam, Terraria should work! If Terraria is still unavailable, try exiting steam one more time, and then starting the game again. If it still doesn't work after that, the Steam servers are probably extremely overloaded (because the $2.50 sale and the 1.1 patch hit today at the same time, a lot of people are probably buying / playing Terraria.

Don't worry, the game will work again soon. Just keep restarting steam and trying again. That is what worked for me. (Took me 2 times of exiting steam and starting Terraria again to get it working.)

Verify Game Cache: There is another fix you can try if the game still won't run for some reason:

- Right click the game in Steam.
- Click properties.
- Local Files.
- Choose Verify Integrity of game cache.

3. Terraria crashes randomly: If you are running an anti-virus program that has a "Game Mode", make sure you turn it on. There is a problem with Terraria crashing because of some anti-virus programs.

- Make sure Terraria is unblocked by your firewall.

- Another fix that works is deleting your config.dat file which resets your video and game settings to default. (Which is probably a good idea anyway after such a huge patch.)

- Try lowering the game resolution, sometimes Terraria will crash on certain PCs at high resolutions.

4. Terraria Full Screen Mode: If you can't seem to run Terraria in full screen mode, try hitting ALT + Enter which will force the game to go into full screen.

5. Update your system: Make sure you have the following updated:.Net framework 4, your video card drivers, the latest version of XNA 4.0 which you should install after the .Net framework 4. Note that Terraria will not run or you will have problems if these things are not installed, or your video card drivers are not updated.

7. Terraria Black Screen Problem: When you load your world in the Terraria 1.1 update, you may see a black screen with just your inventory and health, to fix this press F9 to toggle your lighting method or pressing Alt+Enter to go full screen. (If you're running in windowed mode)

8. System.OutOfMemoryException:

If you are getting the System.OutOfMemoryException error, delete your config.dat file to fix it.

9. Gameplay Bug: NPCs not moving in: If you made a house and are waiting for NPCs to move into the rooms, you may have to wait some time, NPCs do not spawn instantly. The best thing to do is go off and explore, dig, or build for a while, and eventually, you will get a message "NPC has arrived!"

If an NPC spawns but does not head to the room you have built for them, walk off into the distance and come back, the NPC should then move into their room / house.

The last resort if NPCs are still not working is to kill the guide. After he arrives again, other NPCs should follow.